The Fongip will better meet the expectations of the State, partners and beneficiaries
The institutional change of Fongip has just been launched by its Board of Directors at its last meeting of June 28, 2018 on the approval of the financial statements for the year 2017 of the institution It will promote an appropriate framework and sufficiently standardized to meet the new expectations of the State, partners (Banks, Sfd and others) but especially the main beneficiaries (SMEs, VSEs of young people and women).
The proposed model for institutional change from Fongip assimilated to an agency to a FONGIP SA, financial institution will be consistent with the current ecosystem (FONSIS-BNDE-CNCAS-BHS-CDC, other private banks, etc …) and will be completed by a new offer of credit for a social demand for financing that is still very strong and often not “bankable”, supported by the Delegation for Rapid Entrepreneurship (DER) because it is often not eligible for FONGIP’s guarantee products. It will also reconcile the unique public service mission of offering financial products of guarantee that the State has devolved to the FONGIP with the structural realities of the ecosystem of the financing of the national economy by the financial institutions.
With the State sole shareholder or with the participation of the Caisse de Deposits et Consignations (CDC) in the capital, the Fongip would be at the end of this process of about twelve to eighteen months, a financial institution of surety and approved by the BCEAO and will be in legal form of a public limited company with majority public participation governed by the OHADA Uniform Act and Law No. 90-07 of 26 June 1990 on the organization and control of companies in the parapublic sector and the control of private-law corporations with the financial support of public authorities.
This new status should enable the State to acquire a more efficient and autonomous financial instrument, while at the same time ensuring the orientation of society in the priority sectors of the PES within the framework of appropriate governance.
At the operational level, FONGIP SA could offer mainly 7 large funds: a first SME Guarantee Fund (FOGADEV) to absorb at least 40% of the financing gap estimated in 2015 at 500 billion FCFA; a second guarantee fund for long-term loans for the purchase of housing (FOGALOG) for the benefit of people with irregular incomes and Senegalese from the diaspora who provide more than 60% of our economic fabric; a third guarantee fund for the refinancing of public contracts to ensure the treasury of SMEs (FOGAMAR); a fourth guarantee fund for exporting companies (FOGAREX) which have no financial support for their development while facing strong global competition; a fifth guarantee fund for the financing of local economic development through sustained support for income-generating activities and investment projects of local authorities (FOGAVILLE) in order to complete the financing of act 3 of decentralization; a sixth guarantee fund for the financing of productive investments by Senegalese abroad (FOGARISE), and a seventh guarantee fund for the loan improvement of SFD (FONBONI). Other thematic and sectoral funds could be developed according to the evolution of the national economy.
Several of these specific funds have already been put in place since 2015 by FONGIP’s General Manager, Mr Doudou KA, but their implementation is facing resource mobilization constraints for the necessary cash flow and, above all, regulatory constraints. related to the current status of the fund.
Taking charge of the SME financing issue should lead the Senegalese government to continue building a powerful public guarantee lever in line with the ambition defined by the FONGIP’s Board of Directors FONGIP interventions since 2014 have directly and significantly impacted the financing of Senegalese SMEs like Morocco with its Central Guarantee Fund, Canada with Investissement Québec, France with its Public Investment Bank and Côte d’Ivoire which will launch in 2018, its National Guarantee Fund with an initial endowment of 100 billion CFA francs at a time when FONGIP modestly displays a grant of 23 billion CFA francs after four years of activities. Fortunately, FONGIP SA’s institutional post-transfer business plan aims to ensure financial equilibrium starting in 2022, with an initial capital of CFAF 50 billion), to comply with the Basel prudential provisions. II / III, which will consolidate it as indicated in its business plan in the regulated ecosystem of the BCEAO and, last but not least, to bridge over a 5-year horizon in 2024, 25% of the SME financing gap estimated at 500 billion F CFA.
Also, in 2018 and 2019, it will be a transitional year for this major project, for the FONGIP road and structural engineer to continue the process of technical assembly and sharing of thematic, sectoral, and already created, consolidated and implemented an internal transformation plan to support the necessary organizational and operational changes.
The new business model thus qualified by FONGIP SA will undoubtedly boost the performance of the future financial institution which has already taken its marks in the financial ecosystem with the feeling of an essential tool for the country’s economy confirmed by recent studies but still remains an unsuccessful tool according to the different beneficiaries interviewed. In the 4 years of its existence, the Guarantee Fund for Priority Investments has played a significant role in the achievement of the objectives assigned by the State, by granting guarantees to 900 SMEs and allowing the financing of 1405 GIEs of young people and young people. women among others, for a total financing of 47.09 billion FCFA in 43 of the 45 departments of Senegal. The Fund has thus largely contributed to the employment policy defined by the President of the Republic Macky SALL by allowing the creation and consolidation of more than 30,399 jobs. These results were obtained thanks to an important territorial intervention system of its services in Dakar, St Louis, Tambacounda, Kaolack and Ziguinchor.
Finally, to give the right tone of this new stage launched for the institution, the management accompanied by its board of directors and the ministry of supervision of the economy, the finances and the plan wanted to make the acquisition of the new seat at the end of 2017, at the end of 2017, the starting point of the “Fongip New Look” towards the institutional change in anonymous company in order to obtain its approval as a financial institution, surety bond and refinancing loan.
Reflections on the financing of various flagship specific funds that go hand in hand with the choice of the economic model, were also discussed and studied by the consultants selected by the management of the fund and proposals emerged with, for example: a parafiscal tax on the ton of cement to abound the FOGALOG like the FOGARIM in Morocco, participations of organizations of the diaspora like FONGAD to mobilize a part of the resources of the FOGARISE, the contributions of the local authorities for the FOGAVILLE, a quote share of deposit remunerations of some savings accounts etc …
So, good wind to this important financial mechanism of the economic policy defined by the President of the Republic Mr. Macky SALL in his program Yoonu Yokutte and which will certainly give a structural solution to the financing of SMEs in Senegal and will contribute significantly to build a climate of confidence between SMEs which accounts for 99% of the national economic fabric and financial credit institutions.